Defense Budget Decision Postponed

June 17, 1980

TEL AVIV (Jun. 16)

Premier Menachem Begin postponed a decision on the explosive issue of defense budget cuts today by naming Agriculture Minister Ariel Sharon to head a four member panel that will try to work out a compromise between the Defense Ministry and the Treasury. Its recommendations are expected in several days.

The immediate result was to raise a storm of protest within the Cabinet and in the Knesset where coalition and opposition members charged that Sharon was being brought into the defense establishment through the back door. The defense establishment itself was unhappy since Sharon made it clear to the top army brass today that “A cut can be made and will be made.” The committee Sharon heads will consist of two senior officials from the Finance Ministry and two from the Defense Ministry. Sharon will have the deciding vote.

Begin acted to avert a showdown with Finance Minister Yigal Hurwitz who is demanding a IL 15 billion reduction in the defense budget this year. Hurwitz stormed out of a meeting with Begin and Chief of Staff Gen. Raphael Elton yesterday and absented himself from the regular weekly Cabinet meeting. He told reporters later that his walk-out was a gesture of protest against procrastination and indecisiveness by the government. The inflation rate rose by another 9.5 percent last month.

Begin, who is serving temporarily as Defense Minister ,convened another meeting today with senior officers at General Headquarters. Hurwitz and Sharon attended. The Finance Minister contended that the rapidly deteriorating economic situation was a greater menace to the security of the State than the proposed budget cuts. He was strongly backed by Sharon, a retired general and Yom Kippur War hero.

EITAN QUESTIONS OTHER SPENDING

But Gen. Eitan, who has been campaigning vigorously against the cuts demanded to know where the money is coming from to build a new building for the State-owned Bank of Israel. If there is no money for fuel for tanks, why are large, luxurious cars rooming the streets? he asked. “How can you demand a cut in the defense budget when 300,000 Israelis are able to travel abroad every year?”

These arguments are not considered likely to prevail. Since Ezer Weizman resigned as Defense Minister on May 26, partly because of his dispute with Hurwitz over the budget cuts, the defense establishment seems to have lost much of its political clout. Begin appears to have adopted the role of a mediator in the dispute.

The protests against Sharon, the Cabinet’s leading hawk, stem from another political matter. He is believed to have been Begin’s first choice to replace Weizman but his appointment was firmly opposed by the liberal Party and the Democratic Movement, two of Begin’s coalition partners. His critics were angered therefore when he was given, in effect, the final say on the Defense Ministry budget.

Meanwhile, the impending budget cuts have resulted in cancellation of the traditional Air Force Day fly over and aerial acrobatics. The planes will be grounded to save fuel. The Air Force cadets will receive their wings but will have to be satisfied with a parade on the ground.